We’ve all asked the question, especially lately–“Why do gas prices fluctuate?” The current price of crude oil plays a huge role!

The image below shows what percentage of our money goes where when purchasing gas. Albeit numbers from 2004 and 2005, the percentages have not changed much in the past few years. Consider how much of the cost of gas is found in the price of crude oil!

So why do gas prices fluctuate? Well, if 50% of the cost of gas is directly influenced by the cost of crude oil, we can assume that retail gas prices fluctuate based on fluctuations in the crude oil market.

The following graph is a 6-year price tracker for crude oil.

As the graph shows, crude oil prices died during financial crisis. At that time, the recession took a lot of the value out of a barrel of crude oil. As a result, gas prices fell.

Next, we compare the average cost of retail gas in the United States (blue line) with the cost of crude oil (red line) over a 6-year period.

Again, can you see the trend? Crude oil costs and retail gas prices move in tandem; however, as you can see in the graph, they don’t move perfectly together. Why? Remember–the cost of crude oil is only ONE factor involved. There are other factors. To learn more about why gas prices fluctuate, consider the following articles written by Financial Nut:

Every thing I have read does not explane why gas prices were almost $4/gal in PA in Spring. Now the price is $3.15/gal. The public will never know why. They’re just told it’s the cost of a barrel of oil and a couple of other factors. The public is either stupid or know it’s crap and can’t do a thing about it anyway. I would really like to know why it goes up and down but I’ll never know the truth. I’ll just have to assume it’s all bullshit. How does it feel to be one that reconizes that they are being feed bullshit every day of their life for one thing that has a huge impact in their life?